From Fixed Price to Finished Project: How Stream Home Construction Keeps Your Budget Intact

How Do You Ensure A Project Stays On Budget?

Ever wondered why construction projects so frequently go over budget? Alex Kosley pulls back the curtain on budget control secrets that have made StreamHome Construction one of the most trusted general contractors in Colorado Springs.

The conversation dives deep into the power of fixed price contracts—a cornerstone of Stream's approach to residential and ADU projects. Unlike contractors who rely on change orders to pad their profits, Stream operates on a model where the price only changes if the scope itself changes. This seemingly simple distinction has profound implications for homeowners who want financial predictability without sacrificing quality.

Whether you're planning an ADU in your backyard or renovating a commercial space, these insights could save you thousands in unexpected costs. Ready to experience a different kind of construction process? Visit online or call for a free on-site consultation and discover why so many Colorado Springs residents trust Stream with their most important projects.

To learn more about StreamHome Construction visit:
https://www.YourStreamHome.com
StreamHome Construction
719-644-6777

Episode Transcript

Speaker 1 (00:04):
Welcome to the Stream Home Construction Podcast,
where we take your project fromconception to completion.
Hosted by Licensed GeneralContractor Alex Kozley, we cover
everything from accessorydwelling units to commercial
construction in the greaterColorado Springs area.
Whether you're dreaming of anew ADU, planning an office
upgrade or tackling a majorrenovation project, we've got

(00:26):
the expertise to guide youthrough it.
Let's get building.

Speaker 2 (00:38):
Welcome back everyone .
Tony Hills, co-host, slashproducer, back in studio with
Alex Cosley.
Alex, how's it going?

Speaker 3 (00:45):
I'm doing great today , tony, how are?

Speaker 2 (00:47):
you doing.
That's great to hear.
Great to hear.
Alex, everyone wants to knowhow do you ensure a project
stays on budget?
Is there a secret constructionfairy we don't know about?

Speaker 3 (00:59):
Well, there's no construction fairy that we've
found yet.
But there is a system.
We built that system from theground up to serve homeowners
and business owners across theFront Range.
First, the foundation really isfixed price contracts.
For most of our residential andADU projects in Colorado
Springs we operate on a fixedprice model.
That means if it's in our scopeof work, we're doing it and the

(01:20):
price won't change.
The only time the cost adjustsis if the scope itself changes.
Using fixed price contractsprotects homeowners from the
common nightmare of constantchange orders.
We create hyper detailed scopeof work documents before the
project starts to ensure thereare no surprises.
Every cabinet, fixture, paintcolors accounted for before we
break ground.

(01:40):
If we ever miss an item, we'resure to add it to our project
template so it won't be missedagain in the future.
Also, with the fixed pricecontract, if we ever miss an
item, we're sure to add it toour project template so it won't
be missed again in the future.
But also with the fixed pricecontract, if a project took us,
say, a month longer to completeversus what we projected, we
don't charge extra to ourclients.

(02:02):
This increases the incentivefor us to better control costs
and budget internally, whereascontractors that just pass these
overages onto their clientshave minimal incentive to
correct these types of issues.
We also use proprietary projectmanagement tools that actively
track both budget and schedulein real time.
Here's something a lot of peoplemiss when schedules slip, costs

(02:24):
rise Really.
Schedule slippage is probablythe primary contributor to
schedule and budget overruns inthe construction industry.
Delays create ripple effectsthat can seriously impact your
bottom line, whether we'rebuilding a backyard ADU or
remodeling a commercial officespace time but again, in a fixed
price contract, our clients donot have these costs rolled back

(02:44):
up to them.
And what's the biggest culpritbehind cost overruns?
Well, aside from scheduledslippage, once a project's
running, the biggestcontributors are poor planning
and mid-project indecision,which is why we work closely
with clients to finalize allmajor decisions before
construction starts, becausewaiting until you're in orbit to

(03:05):
figure out the flight plan justdoesn't work.
I recently heard a ConstructionSystems podcast host describe an
encounter he had with a NASAengineer who's been working on
the same project for 10 years.
The biggest thing that this guygleaned from the conversation
is that contractors can take anote from NASA engineers and
essentially do everything we canto ensure there's a solid plane

(03:26):
in place prior to takeoff.
Construction is not ascomplicated as rocket science,
but the same principles apply.
Having a solid plane in placeprior to launch greatly
increases the chance of success.
All of the parts and componentsof a project intertwine, just
like within a rocket, so notknowing what all the parts and
pieces are and where they gobefore taking off is a recipe
for disaster that can lead topeople getting hurt and

(03:49):
something we don't want tosubject our clients to.
But if we had a secret weaponor maybe you might call it a
construction fairy that's thisfor our team.
We care deeply.
If we miss something thatshould have been in our scope,
we most often takeresponsibility for it rather
than passing that on to theclient with a surprise change
order.
That's not magic, that'sintegrity, and it's what makes

(04:10):
us one of the most trusted GCsin Colorado Springs.
So again no fairy dust, justexperience systems and a team
that's committed to deliveringtop-notch ADU and remodeling.

Speaker 2 (04:21):
What do you do when you notice a potential issue
that could impact the budget?

Speaker 3 (04:25):
So as soon as we identify a potential issue, you
know, first step is to let theclient know.
Now, typically we want to get alittle more information before
we go to the client to betterunderstand what are the
implications, what are therepercussions If it's something
that we've missed, somethingthat comes up that could
potentially delay the project.
Well, let's say, the client isdelayed in making their

(04:45):
selections and that's going tocause a delay to the project.
Our intent is to let the clientknow as early on as possible
what the implications of thatdelayed decision can be, from
there and then give them somechoices.
Either we keep working andlikely incur some delay and some
inefficiencies that willincrease the price, or we can
stop work until these conditionsare met so that we can proceed

(05:08):
and minimizing any additionalexpenses in the event that
something like that comes up.

Speaker 2 (05:14):
Okay, how do you ensure the initial estimate is
as accurate as possible when youfirst start the project?

Speaker 3 (05:20):
That's a great question.
The biggest way that we do thatis by using template estimates
that really encapsulate prettymuch every potential expense
that could come on a project, sothat we have 150 line items,
and a lot of times we're justdeleting those line items
because they may only show up onone out of every 10 projects.

(05:45):
Much rather have extra things inour estimate that need to be
deleted than to have things thataren't in there that need to be
added, because it's a loteasier to see something that
doesn't belong than to seesomething that does belong and
that isn't there.
So we found that just one waythat we can really make sure our
estimates are complete isrelying on previous estimates
and, as I mentioned in responseto the first question, anytime
we miss something, you know, ifwe realize, hey, this is

(06:06):
something that's missed, it'sgoing to be at least on 10% of
our projects we're going to addthat into the template.
That way it's not overlooked inthe future.
That's probably really thebiggest way that we address that
.
But we also have multiplelevels of reviews of our
estimates, internally as well aswith clients in most cases.
So there's just high levels ofreview.
We've got several systematicchecklists and systems in place

(06:29):
to really ensure that thatprocess is tight and lots of
different double checks is kindof part of our secret sauce.

Speaker 2 (06:36):
Okay, well, alex, as always, that's some informative
and helpful information you gaveus today.
We'll catch you in the nextepisode.
Have a fantastic rest of yourday.

Speaker 1 (06:47):
Thanks, tony, we'll see you next time.
That's a wrap for this episodeof the Stream Home Construction
Podcast.
Ready to bring your vision tolife, snag a free on-site

(07:09):
consultation by visiting ourwebsite at wwwyourstreamhomecom,
or call or text us at719-644-6777.
Until next time, let's keepbuilding your residential and
commercial dream in the greaterColorado Springs area.